ArcelorMittal Shares Surge 69% YTD: Can It Sustain the Rally?

ArcelorMittal S.A.’s MT shares have rallied 69% year to date. The company has also outperformed the Zacks Steel - Producers industry’s 46.8% growth over the same time frame. 

The rally is supported by stronger operating performance, improving cash generation and higher shareholder returns. Its EBITDA and operating cash flow are aided by positive price-cost effects and lower working-capital investment. The company is also advancing electric arc furnace (EAF), non-grain-oriented electrical steel (NOES) and Liberia expansion projects that support longer-term capacity growth and higher-value steel production. 

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Let’s take a look at the factors that are driving MT stock. 

ArcelorMittal Advances EAF and NOES Growth Projects

The company continues to expand its steelmaking capacity while increasing its focus on higher-value-added and lower-carbon steel products. ArcelorMittal is advancing strategic projects across Europe, including a new 1.1-Mt EAF at Gijón, a 0.8-Mtpa capacity expansion at Sestao and a new 2-Mtpa EAF at Dunkirk. The company is also strengthening its electrical steel and downstream capabilities, including NOES projects in Europe and the United States, to address growing demand for specialized steel products and support long-term growth.

ArcelorMittal continues to advance its growth investments, including the development of a NOES facility in Alabama. This new plant aims to meet the rising demand for high-quality electrical steel while supporting manufacturers with a reliable domestic supply and addressing supply chain challenges. As part of this initiative, the ArcelorMittal Calvert plant will include an annealing and pickling line, a reversing cold mill and an annealing and varnishing line, with a capacity of up to 150,000 tons per year and completion targeted for the second half of 2027.  

The company is also progressing with the Liberia iron ore expansion, which is being commissioned toward a 20-million-ton annual capacity. In addition, ArcelorMittal is advancing studies for a potential second 1.5-million-ton EAF at Calvert, which could expand domestic steelmaking capacity and strengthen its position in the U.S. market.

ArcelorMittal Boosts Shareholder Returns and Cash Flow

ArcelorMittal remains focused on shareholder returns through dividends and buybacks. In the first half of 2026, it returned $0.7 billion, including $0.2 billion in dividends and $0.5 billion in share repurchases. The company has reduced its fully diluted share count by 38% since September 2020. 

For 2026, the company plans a quarterly base dividend of 15 cents per share and will allocate 50% of post-dividend free cash flow to buybacks. Total shareholder returns are expected to exceed the policy minimum, supported by stronger second-half cash generation. 

ArcelorMittal generated roughly $1 billion of operating cash flow in the second quarter of 2026, benefiting from improved operating performance and a lower working-capital investment compared with the first quarter. EBITDA increased 22.9% sequentially to $2.1 billion, supported by improved performance across all steel segments and positive price-cost effects. 

MT’s Zacks Rank & Key Picks

MT carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Basic Materials space are Worthington Steel, Inc. WS, Carpenter Technology Corporation CRS and Avient Corporation AVNT. WS currently sports a Zacks Rank #1 (Strong Buy), while CRS and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WS’ current-year earnings is $3.4 per share, implying a 52.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 13.8%. Shares of the company have gone up by around 0.8% in the past three months.

The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $13.09 per share, implying a 21.7% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.4%. Shares of CRS have surged around 33.5% in the past three months.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%. Shares of AVNT have surged around 39.1% in the past three months.

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This article originally published on Zacks Investment Research (zacks.com).

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